Curis enlists allies in Florence copper mine fight

When Curis Resources needed a boost last summer for its controversial copper-mining proposal in Florence, the company's key lobbyist contacted a longtime friend: Gov. Jan Brewer.

Brewer, at the invitation of lobbyist Chuck Coughlin, on Aug. 2, 2011, attended a closed-door gathering of mining executives and business leaders at a Florence winery. The pro-mine rally was not listed on the Arizona governor's schedule -- but project opponents found out about it and demonstrated outside.

The governor praised Curis in a speech prepared for that audience, saying, "I'm grateful for the opportunity to stand together with you tonight in support of such a wonderful economic-development opportunity. I hope that we'll be able to see this through."

That speech was no surprise to those working for HighGround Inc., Coughlin's public-relations and political consultancy. Coughlin's firm worked on Brewer's speech days before it was delivered, e-mails obtained from the Governor's Office under the Arizona Public Records Law show.

While it is common for lobbyists to draft legislation for elected officials and even write speeches for them, it can appear unseemly to the public, which does not have that kind of access. A University of Arizona ethicist added that when those relationships are not disclosed and there are financial gains at stake, it can undermine public confidence in government.

E-mail records show HighGround sent a draft speech to Brewer's staff on July 28, 2011. The draft is nearly identical to one on official state letterhead and identified as having been delivered by the governor five days later in Florence.

HighGround strongly denies it wrote the speech. HighGround said it worked with Brewer's staff to ensure that the remarks were accurate and timely.

But Joseph Sciarrotta Jr., the governor's legal counsel, informed The Republic in writing that no records exist of a draft of the speech originating in the Governor's Office. In addition, an e-mail to Brewer's community-affairs manager from Ryan Smith, a HighGround account executive, said another HighGround employee would be "punching up" the speech before Brewer delivered it.

That e-mail was sent one day before a "final draft" was sent to the Governor's Office by HighGround, records show. The draft, records show, was then forwarded to Brewer's speechwriter, her natural-resources policy adviser and her director of scheduling.

HighGround has enjoyed a unique relationship with Brewer. It has done consulting work for her over many years and has run her campaigns, including the 2010 gubernatorial race.

Curis needed political clout when the battle developed two years ago in Florence over a technique known as in-situ mining. Coughlin's firm, with its relationship to the governor, could provide that access.

In-situ mining is a specialized and less costly technique in which an acid solution is injected underground to leach out valuable metals that are later sucked back to the surface by powerful pumps and extracted.

The problem: Many of Florence's residents don't want it, fearing groundwater pollution. Surrounding land developers don't want it for the same reason -- and because a mine doesn't fit into their plans for a residential boom across the landscape.

Key opponents include most officials at Town Hall, as well as developer Southwest Value Partners, the Gila River Indian Community, the Home Builders Association of Central Arizona, Central Arizona Association of Governments, Pinal Partnership and Johnson Utilities.

What has evolved is an overtly political clash of interests. With big money on the line, Curis brought in big guns.

Allies sought

Curis, based in Canada, has relied on Coughlin in this high-stakes political and public-relations fight. The project would be a financial boon to Curis -- and potentially the state -- but the company needs help from Brewer and others to overcome local opposition.

Robert Johnson, HighGround's vice president of public affairs, said HighGround staff did not write Brewer's speech, though the Governor's Office could produce no records to indicate that it originated there. Johnson said HighGround worked with her staff to ensure that the remarks were accurate and timely.

"We provided facts about the project and local background information," Johnson said. "We are generally aware of the governor's strong support for the mining industry in Arizona and the vital role the industry plays in helping revive Arizona's economy."

The Republic reviewed more than 400 pages of records from the Governor's Office and found none indicating her staff wrote the speech. The governor's spokesman, Matthew Benson, would not answer when asked directly at least three times who wrote the speech. On one occasion, he responded that the office had provided all of the information it planned to provide.

When asked if there were records to prove that Brewer's staff, not Coughlin's, wrote the speech, Benson said he would not provide "every draft reflecting every new series of edits that one of the governor's speeches has undergone."

David Bodney, attorney for The Republic, on Aug. 15 sent a demand letter to the Governor's Office seeking "records that would reveal the speech's original author or draftsperson, including the first date on which the speech was generated by your office."

Sciarrotta, the governor's legal counsel, on Aug. 24 wrote that "no such records exist within our office that fall within the scope of your request." Sciarrotta did not respond to requests for comment.

Informed of Sciarrotta's response, Johnson, who twice previously denied that the firm wrote Brewer's speech, said the company stood behind his earlier statements.

"What matters most are the remarks as delivered by the governor," Benson said. He acknowledged that HighGround "assisted with the remarks the governor delivered at a community event in Florence." Benson conceded the practice was uncommon.

"It is extraordinarily rare that a consulting or lobbying firm would be involved in a speech of this nature. In this instance, HighGround's assistance was sought to ensure the remarks reflected the latest status of discussions involving the Curis mine," Benson said. "As always, the governor and her staff maintained full editorial control over the remarks at all times."

Though Benson said Brewer attended the event to "learn more about the Curis project," her speech indicated she was aware of the company and already knew its chief executive, Michael McPhie. She thanked the company for its proposed Arizona investment.

Curis, a publicly traded company on the Toronto Stock Exchange, issued a news release the day after Brewer's speech. In that release, Curis quoted a section of the speech wherein the governor praised the company.

Mine opponents say the speech shows the lengths Curis is willing to go to enlist powerful support for the project. They contend Brewer did not do her homework before throwing her support behind Curis.

"If you can't see the politics in this? It's crazy," said Florence Mayor Tom Rankin. "They went to Chuck Coughlin to get the governor. ... This controversy would not be going on if the mine was in the middle of Scottsdale."

Coughlin, who refers to himself as Brewer's "close friend and supporter," bristles at suggestions that he could manipulate the governor, saying, "She is her own person."

Suzanne Cummins, a senior lecturer who teaches ethics and management at the University of Arizona, said it is no secret that Brewer has supported mining in Arizona and that she constantly seeks ways to create jobs. But Cummins said Brewer should have disclosed that a lobbying firm working for the mine helped with the speech.

"In the end, you need to tell the truth," Cummins said, adding there can be an appearance of impropriety when someone is not forthright about who has written his or her speech.

Political clout

The political clout lined up behind Curis doesn't end with Brewer. Arizona State Land Commissioner Maria Baier added her voice to the chorus of support, and her agency holds a key that could open the door to mining in Florence. The Land Department controls 160 acres of state trust property in the midst of Curis' mining tract. But, unlike Curis' property, which requires town approval to mine, the state trust land can be mined without Florence's permission. All Curis needs is Baier's OK and permits.

Baier, appointed by Brewer in 2009, is a lawyer who, like Coughlin, was on former Gov. Fife Symington's staff. Records obtained by The Republic show that Coughlin, as a Curis representative, sent Baier and her staff e-mails for more than a year about mine issues and strategies to battle Curis opponents. Coughlin also invited Baier to Brewer's speech in Florence last summer, e-mail records show, and he offered to carpool with the land commissioner.

Baier declined the invitation, citing another commitment, but three weeks after Brewer gave her speech in Florence, Baier wrote to Curis saying she had determined that the mine would pose "no substantial threat" to the environment.

She estimated that the state land trust would reap $100 million to $150 million in royalties from the project. More recent projections by her staff say royalties could hit $180 million, with the state Pioneers Home, the Department of Juvenile Corrections and the Department of Corrections being beneficiaries.

Land Department records show Baier vigorously defended the project in correspondence with Florence Vice Mayor Thomas Smith, who questioned how Baier could make a decision before findings have been issued by the U.S. Environmental Protection Agency or the Arizona Department of Environmental Quality. Neither agency has given approval for the mining.

Baier said in writing that she based her decision on 20-year-old tests involving 13 acid-injection pipes by other mining companies on the same property. Smith noted that Curis intends to drill more than 2,000 holes and pump "100 million times more acid into the ground."

Baier also argued that the project is planned on an established mining site: "Some opponents ... have tried to present a picture of Curis and the (Land Department) forcing a new mine in the middle of the Town of Florence," she wrote, "while, in reality, the town has grown around and past an existing mine over the last four decades."

Smith replied, "This property has never been mined commercially. The only history is one of speculation peppered with testing." He noted that Baier's agency recognized mining was no longer compatible in 2007, when, under a different land commissioner, it supported Florence's master plan.

Baier, in an interview, said she is legally required as land commissioner to maximize revenue from the 9.3 million acres of state trust land under her department's control. That includes the 160acresCuris wants to mine in Florence.

"It's a big moneymaker for the trust," Baier said. "As a trustee, I would be violating my obligations to not consider this type of project. ... I don't get to make independent emotional evaluations. My job is pretty clear about generating revenue for the trust beneficiaries."

Baier said Coughlin has not received special consideration as a Curis' representative, despite their correspondence.

The Brewer and Baier endorsements took on importance this spring when word leaked of proposed stealth legislation allowing Curis to donate its private holding to Arizona's land trust -- property under Baier's control.

Because state trust land is immune from local regulation, the entire Curis parcel could then have been opened to mining -- with regulatory permits and a sweep of Baier's pen -- regardless of local opposition. Opponents unfurled a campaign that killed the idea before a bill was tendered at the Capitol.

State officials now claim they are not necessarily committed to supporting Curis' project. Baier said in an interview that her department would await EPA and ADEQ permits before deciding whether to clear the company to mine on state land. Benson said Brewer has not taken a position regarding mining on state trust land, despite her speech.

Lawsuits considered

The final chapter in this saga likely will be written in legal papers.

Curis' lawyers recently spent more than three weeks scanning 17 boxes of mine-related documents at the Florence Town Hall, and the company's 2012 financial report hints at a civil suit against mine opponents.

Daniel Hodges, vice president of Johnson Utilities, suggests Curis may be a defendant rather than a plaintiff if the mine begins operating, saying, "It's in our best interest to do whatever we can to protect the customers and the groundwater."

Meanwhile, Florence officials strive to use their local authority against Curis. In April, town police and inspectors showed up at company offices, ordered them closed and posted a sign on the door: "Condemned. Do Not Enter. Unsafe to Occupy."

Curis officials chuckle at the basis for the closure: The site has no potable water. They filed suit in Pinal County Superior Court and negotiated an agreement to reopen while litigation continues.

On Aug. 6, the Town Council passed an ordinance making in-situ mining a crime within 2 miles of the town limits. Curis' attorneys say the ordinance amounts to an unlawful taking and have threatened to sue.